January was the best month for the Dow since March 2016, while the Nasdaq composite had its biggest one-month gain since October 2015. The S&P 500 gained 5.6%, its best January performance since 1997. There is an old saying on Wall Street – as January goes, so goes the year. This refers to the January Barometer. Since 1980, the January Barometer has correctly predicted the S&P 500’s year-end direction 68 percent of the time. Past performance is not a guarantee of future results.

Today, the major indices started in negative territory, then started to rally, only to fade into the close. After the closing bell we saw several major tech firms post earnings. Results varied.

Alphabet reported fourth-quarter losses of $3 billion, or losses of $4.35 a share, compared with net income of $5.3 billion, or $7.56 a share, in the year-ago period. The company’s effective tax rate jumped to 138% from 22% in the year-ago quarter and it booked a tax expense of $9.9 billion due to changes in the tax code. Revenue rose to $32.3 billion from $26 billion in the year-ago period – that pushed Alphabet’s annual revenue well above $100 billion. Net revenue came in at $25.9 billion vs. $26.2 billion expected. Earnings came in at $9.70 per share vs. $10.04 expected. Alphabet share dropped about 3% in after-hours trade.

Amazon reported a big jump in fourth-quarter profit and revenue that rose above expectations. Net income rose to $1.8 billion, or $3.75 a share, from $749 million, or $1.54 a share, in the same period a year ago. The results included a one-time benefit of $789 million from tax-reform legislation. Amazon reported a 38 percent jump in fourth-quarter revenue, driven by holiday shopping and strong demand for its cloud services. Amazon shipped over 5 billion items worldwide through its subscription-based Prime service in 2017. Sales of the Alexa assistant were not broken out, but Jeff Bezos said they exceeded expectations. Amazon shares gained about 2.5% in after-hours trade.

For the final quarter of 2017, Apple said it sold 77.3 million iPhones, down 1 percent from a year earlier and below analysts’ projections of 80.2 million units. The average selling price was $796 — ahead of expectations — suggesting its flagship iPhone X handset sold relatively well, while cheaper versions weren’t as popular. Apple reported fiscal first-quarter revenue of $88.3 billion, and profit of $3.89 a share, beating average analyst estimates. Apple’s cash reserves jumped to $285 billion, adding to the pile of offshore money that will be taxed under new legislation introduced in the U.S. recently. The company said last month that it will bring hundreds of billions of dollars back to the U.S. and pay $38 billion in tax.

Alibaba Group, China’s biggest e-commerce company, said its third-quarter revenue jumped 56 percent, beating expectations. Alibaba will take a 33 percent stake in payment affiliate Ant Financial, an important step ahead of an expected initial public offering (IPO) by Ant. The deal with Ant, which will replace the current system where Alibaba receives 37.5 percent of Ant’s pre-tax profit, will see the company acquire newly-issued equity in the affiliate in exchange for certain intellectual property rights it owns. The company also raised its 2018 revenue forecast to growth of 55 to 56 percent, up from 49 to 53 percent.

Visa reported fiscal first-quarter estimates after the close that beat results, helped by solid holiday spending and e-commerce. The company also OK’d a $7.5 billion buyback.

CBS and Viacom have formed special committees to explore a merger, the first step in potentially reuniting the companies split by media mogul Sumner Redstone more than a decade ago.

EBay is dropping PayPal as its main payment processor in favor of Dutch company Adyen. EBay acquired and owned PayPal for years but spun off the company in 2015. EBay said the move to Adyen would result in lower costs for sellers and more payment options for buyers.

United Parcel Service shares slid 7% after it gave a 2018 earnings forecast that fell short of analyst estimates and said it would spend at least $6.5 billion this year improving its delivery network. Both UPS and rival FedEx have already spent billions of dollars upgrading their networks to handle surging e-commerce package volumes, weighing on margins and leaving investors frustrated over the expense. But UPS said there was still work to be done. Network bottlenecks that delayed some deliveries during the key holiday season cost about $125 million. It spent $1.5 billion on capital in the quarter, and some $60 million on installing new technology and automated capacity.

Automakers posted mixed US new vehicle sales data for January. Sales of trucks, SUVs and crossovers were decent, while sales of passenger cars slipped. GM said January sales rose 1.3 percent, driven by a 16 percent rise in fleet sales. Ford posted a 6.6 percent sales decline for January, with retail sales down 4.3 percent. Toyota’s sales rose 16.8 percent in January. It noted strong demand for its pickup trucks and SUVs. Fiat Chrysler said new vehicle sales fell 13 percent in January, driven by a 50 percent drop in fleet sales – they are trying to move out of that low margin area. Fiat Chrysler sales to consumers rose 2 percent to their second-highest level since 2001. Nissan said its sales rose 10 percent in January, with pickup trucks, SUVs and crossovers up 18 percent. US auto industry sales fell 2 percent in 2017 to 17.23 million vehicles after hitting a record high in 2016 and are expected to drop further in 2018 despite a solid economy.

The Institute for Supply Management reports its January PMI came in at 59.1, that’s down 0.2 percentage points from December but still a very strong number. Any reading above 50 indicates growth. Beneath the headlines, the details reveal a cooling off from ultra-high levels but still healthy expansion. The new-orders index dipped just 2 points to 65.4%, the production index fell 0.7 point to 64.5% and the employment index sank 3.9 points to an eight-month low of 54.2%. Inventories and supplier delivery rebounded. The price index surged to the highest level since May 2011. Lead times for cap-ex expanded, indicating businesses are re-investing.

The Atlanta Fed GDPNow forecast for the first quarter of 2018 rose to 5.4 percent from 4.2 percent.

Worker productivity fell in the fourth quarter of 2017, the first drop since early 2016. The Labor Department said that the hourly output per worker fell at a 0.1% annualized rate in the fourth quarter. The drop in productivity is largely blamed on a shortage of workers, but whatever the reason it could act as a constraint on GDP growth. Overall productivity in 2017 increased 1.2%, the strongest performance since 2015.

The number of people who applied for unemployment benefits in late January fell by 1,000 to 230,000, keeping initial U.S. jobless claims near a 45-year low. Tomorrow, the Labor Department reports on January Non-farm payrolls, with estimates running around 175,000 to 185,000.

The Commerce Department reported a 0.7% gain in construction spending in December, and a 2.6% advance over the past 12 months. That’s the fifth monthly gain in a row and a record high annual rate of $1.25 trillion. Residential spending jumped by 10.4%, but there were declines in spending for power, highway and street, sewage and waste disposal, water supply, conservation and development and manufacturing.

Cape Town is the second largest city in South Africa – nearly 4 million people call Cape Town home. If things stay as they are, Cape Town will become the world’s first major city to run out of water. This is the reality: Most of the city’s water is supplied by dams. The dams are currently three-quarters empty. On the day the dam levels reach 13.5 percent of their capacity (known otherwise as “Day Zero”), the city’s taps will be shut off and residents will be allocated just 6 gallons of water a day, which they have to line up to collect. City officials hope that will leave enough water in the dams for the city to limp along for 3 months until the rainy season brings relief. Water is already being rationed, just 13 gallons per day. According to the City of Cape Town’s projection, Day Zero will fall on April 16th. Day Zero restrictions, in combination with poverty, food insecurity, and already unsanitary living conditions, pose much more of an existential threat. Listeriosis, cholera, and typhoid are serious risks. As it is with every crisis everywhere, poor people will suffer the most. Officials are indeed worried about public safety. The government says it will deploy police and military to guard some 200 water collection sites if authorities have to turn the taps off on Day Zero.